Why the case matters

Prior to the case reaching the Court of Appeal, the lower courts had suggested that an employer might have to undertake, in addition to individual consultations, a workforce consultation where individual redundancies are proposed. This would appear to be mirroring the collective consultation required where redundancy dismissals of 20 or more employees are proposed. The Court of Appeal has now confirmed that this is not the case. 

Facts 

Mr De Bank Haycocks (the claimant) worked as a recruitment consultant for his employer (ADP Ltd, a UK subsidiary of a US company) as part of a team of 16. They were employed solely to recruit employees for one particular investment bank.

The impact of the coronavirus pandemic reduced the bank’s requirement for recruitment services by around 50% so it decided to reduce the client team headcount. The UK manager was given a standard matrix of selection criteria from the US parent company, which she used to assess the 16 employees on 17 criteria with the claimant coming last in the ranking. On 18 June 2020, after the scoring exercise had been undertaken, the US parent company decided to reduce the team by losing two roles. 

A consultation timetable was set whereby all staff in the pool would be informed (individually) on 30 June that they were at risk of redundancy, followed by a 14-day consultation period after which decisions would be communicated. 

The claimant was invited to a meeting at which he was told that there was a requirement for redundancies, that he could ask questions and suggest alternative approaches. He was given a letter stating that a selection matrix scoring process would be used to determine who was selected for redundancy, with an example of the matrix. He was then invited to a further meeting two weeks later and a final meeting a week after that where he was handed a dismissal letter. 

At this point the claimant was unaware of what scores he had achieved, nor was he given the scores of the other 15 employees as a comparison to understand his ranking or how they had been scored against the selection criteria. The claimant appealed against the dismissal decision, and by the time of the appeal meeting he had been given his scores (but not those of his colleagues), but his appeal was unsuccessful.

The claimant brought an employment tribunal claim for unfair dismissal in arguing that the dismissal was procedurally unfair due to a lack of any meaningful consultation and a subjective scoring process. The tribunal dismissed his claim, accepting that he didn’t know his scores until the appeal, but that ADP had then carried out the appeal process conscientiously and the claimant failed to demonstrate that his score should have been higher, or the scores of his colleagues should have been lower.

Appealing to the EAT, the claimant argued that the consultation exercise was unfair as it had emerged during the tribunal hearing that there was, effectively, a decision to dismiss three weeks before commencement of consultation as the scoring exercise had taken place prior to the consultation period. The EAT allowed his appeal, substituting a finding of unfair dismissal and decided to remit the claim back to original employment tribunal to determine remedy.

The EAT held there had been a clear absence of meaningful consultation by the employer during the formative stage of the redundancy process and the tribunal did not explain why there were good reasons for concluding that the redundancy process was procedurally fair and reasonable. In the EAT's view there was no good reason for the employer not to have undertaken what it described as "general workforce consultation". As for the claimant's appeal, it held that while this could correct any missing aspect of the individual consultation process, such as the provision of the claimant's own scores, it could not remedy the employer's initial failure to consult at an earlier stage.

The company appealed to the Court of Appeal challenging the EAT's view on the requirement for general workplace consultation.

Decision

The Court of Appeal allowed the company's appeal that the claimant's dismissal by reason of redundancy was not procedurally unfair. It rejected the EAT’s view that there should be ‘general workforce consultation’ for smaller-scale redundancies and that the lack of such consultation (without reasonable explanation) would make a dismissal for redundancy unfair. Such a consultation did not replicate collective consultation as at a general workforce meeting, no one, such as employee or trade union representatives, had a mandate to represent the individual employees. 

If such a gap does exist for group consultation it would more properly be addressed by legislation or, perhaps, by ACAS guidance. In this case there was no error of law in the tribunal’s conclusion that, viewed overall, the redundancy process was conducted fairly. 

On the timing of consultation, the Court of Appeal observed that this must take place when the redundancy proposals are ‘at a formative stage’ but that the EAT had decided that this had not been complied with based purely on there being no "workforce level" consultation. It hadn't analysed the actual sequence of events or the employee's claims in the employment tribunal that the company had effectively made the decision to dismiss him at the point at which it conducted the scoring exercise. The EAT’s reasoning therefore fell outside the scope of the ground of appeal that was before it. 

The Court of Appeal agreed that while it was bad practice for the company to carry out the scoring exercise before the consultation started, it had conscientiously addressed the claimant's complaints about the scoring process at the appeal stage. The Court held that there was no error of law in the tribunal's conclusion that, viewed overall, the company had conducted a fair redundancy process and restored the employment tribunal’s decision. 

What to take away

That there is no mandatory requirement to carry out general workforce consultation over redundancies of fewer than 20 employees will come as a relief to employers. However, the Court of Appeal's judgment notes that a fair redundancy procedure depends on the particular facts and that it might be of assistance to have group meetings in addition to individual consultation on small-scale redundancies. The Court also made clear that the employer should have conducted the scoring exercise prior to the consultation period, with the employee being provided with and being given the opportunity to comment on the selection criteria during the consultation process. Here the appeal process cured the prior procedural defects. Had the claimant not appealed, the dismissal might well have been unfair.